URBANA, Ill. — Farmland values in Illinois, as across much of the Midwest, continued their downward direction during 2016, dropping by as much as 14 percent depending on the soil type.

In central and north-central Illinois, home to some of the richest soil in the United States, values declined in 2006 by an average of about 12 percent. In southwestern Illinois, values for medium-grade soil dipped on average by 14 percent. On average, though, land values for the whole state dipped by about 7.5 percent during 2016, according to Gary Schnitkey, an agricultural economist with the University of Illinois.

The main driver for the lower land values – and a corresponding, yet smaller drop in cash rents – continues to be lower and stagnant commodity prices. “Those declines in commodity prices have caused lower returns,” Schnitkey said. “Lower returns to farmland mean lower cash rent and falling land prices. Cash rents came down about $20 to $25 per acre on average … and that would be for professionally managed farmland.”

The economist recently contributed to the annual Illinois Farmland Values and Lease Trends report published by the Illinois Society of Professional Farm Managers and Rural Appraisers. During an annual conference last month sponsored by the society, the co-chair of the event – economist David E. Klein with Soy Capital Ag Services in Bloomington – noted while 2016 was a challenging year for farmers, the downward movement does not come close to the impact of the 1980s farmland slide.

“2016 brought continued challenges for Illinois agriculture with increasing grain supplies and wide price variations, as a result of one of the best growing seasons ever recorded,” Klein said. “Most farm incomes continued their retracement from recent historical highs.

“As we begin 2017, farmland seems to be finding its footing as farmland owners and investors continue to seek this tightly held asset class with its unique investment characteristics.”

Despite the downturn, Schnitkey noted that farmland overall continues to be a good investment over the long term. David Oppedahl, senior business economist for the Chicago Federal Reserve Bank, in February noted that of the five states in his district, Wisconsin is the only one to post higher farmland values since 2013. Badger land is up about 4 percent in the past three years.